[rfc]

Seems excessive on the surface but over the course of a year, that's $60. Still pedantic? Sure, but $60 in adspend for us generates $1200 in revenue. As a bootstrapped company, every dime matters to us.

Why sacrifice that when there are alternative options for cheaper, especially when we're only sending out a handful of emails/mo?

[tomlor]

If every dollar in adspend nets you 20x in revenue, why are you quibbling about 5 bucks a month and not pouring money into advertising?

[yroc92]

I’d like to know as well. If you’re getting 20x ad spend, you’ve hit the jackpot.

[rfc]

Couple things:

1) We're services/project oriented. So for each $1 we spend, we receive ~$20 back on revenue. That unfortunately doesn't compound and isn't recurring in the normal SaaS sense.

2) That's $20:$1 on revenue but not profit. We average between 15-25% net profit. Not great and we're trying to focus heavily on increasing this but it's quite tricky. Incrasing this usually means very expensive equipment purchases for automation.

3) I wish we could pour more money into advertising but we have to save up for additional equipment to purchase to expand services or pay for future software projects that could help us generate recurring revenue. We don't have deep pockets to leverage since it's bootstrapped. Otherwise, we'd have gone in guns blazing on advertising!

[soneca]

If every $1 becomes $3 ~ $4 in profit, makes no sense at all to "save" for equipment.

The progression with only investing in ads, each cycle multiply by tree your profit:

$1 -> $3 -> $9 -> $27 -> $81 -> $243 -> $729 -> $2187

The progression with "saving" the money

$1 -> $2 -> $3 -> $4 -> $5 -> $6 -> $7 -> $8

[kohanz]

I think they're saying that they are unable to meet the demand (lack of either equipment or people) for the new business those extra advertising dollars would bring in. So they can't just continually pour $ into that pump.

Although I agree it's unusual to see that metric used (revenue per ad-spend) for a product that seemingly can't be scaled very much.

[quickthrower2]

They probably could benefit from some finance. Or at least factoring.

[coralreef]

Could be because they lose money on every sale, but will hopefully make up for it with volume.

[wedowhatwedo]

How much time will it take to find an alternative? If it takes an hour, you've spent way more than $60.

[rfc]

We switched from Mailchimp to Sendgrid; not hard to switch back. We were hoping to get to a more robust tool but can make do with the basics for now.

Also, I wouldn't value my time at $60/hr right now. When you're barely paying yourself in order to grow, hard to think of it that way ;)

[pedalpete]

We also switched from MailChimp to SendGrid, but it appears MailChimp will still be more expensive as they bill based on the number of "subscribers" instead of number of emails sent.

On MailChimp our cost is $210/month on SendGrid it is $100.

However, looking at their updated pricing, they also now have "Marketing" as a separate pricing tier, so I can't say exactly how that will affect us.

Keen to hear suggestions of who else to use.

[quickthrower2]

You must be living off ramen then.